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Hello ladies and gentlemen. I am kind of new here to this forum, but I am not new to bitcoin.
I've been always thinking about ways to make more bitcoin. Some people prefer to "day trade" in order to gain currency (dollars) via the "instrument" of bitcoin itself.
And some say you should never marry to an asset and only care about profits. And you could imagine if one BTC was 10 million dollars everyone on this forum would be happy, as long as 1 roll of toilet paper is not 1000$ (USD) in the store (indicating there's huge inflation).
So let's get back to the topic, we're here to make money, some - to make more btc, others to make more USD by trading BTC, the end goal is to be "rich" or at least profitable.
What is the biggest benefit of trading in my opinion? The ability to "short - hedge" which means to preserve USD capital and make more bitcoins while FTX is crashing.
For anybody not knowing how shorting works - this is how it would look like in a real life example;
Imagine you go out on a walk in the city, you reach a certain street and see huge line with people - lining up to get the latest model of an iPhone.
Suddenly a dude who's just leaving the store comes to you and asks you if you want his iPhone, as long as you can return it back to him brand new (unopened) next year exactly on the same day.
You scratch your head for a moment and decide to take his phone while agreeing on the deal. Next moment you ask yourself - wouldn't it be great to sell instantly this brand new phone to somebody on the same line of people in front of the store, maybe for a dollar less, but still close to the original price (1998$) since it's brand new and has never been used.
The days pass by, around 360 days to be exact, you remind yourself you need to return back the unopened phone to that dude from 1 year ago. You rush to the store and buy that same old model so you can return it back.
It appears the price has fallen to 1299$ since the "next generation" model will be up in less than 5 days and people will want to buy it, good for you...
You just purchased it for 1299$ while still having those 1998$ from 1 year ago.
And now what happened? Literally 5 days later you return the phone to the cool dude which gave it to you just like that, and keep a profit of (1998-1299)=699$
Exactly, you won 699$ out of thin air.
Congratulations, that's your first short trade, you managed to sell something while it's at a high price and buy it back later for cheap while keeping the profit for yourself.
The same strategy can be applied to shorting bitcoin, if you did so before the fall of FTX, or before the start of a possible war conflict or any other bad news ... yes even without technical analysis.
Yes ... if you short, you actually make bitcoins on the way down. You protect yourself, you collect blood from the streets. It might be unethical but it might benefit you in the long term.
And here comes the technical analysis point, by having a chart in front of your face, you can determine (speculate) where the asset is overvalued at the moment and short it and buy it back lower when it's cheap.
Let me know what your thoughts are on this topic.
With best regards, CryptoDor.
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